tv Business Deutsche Welle April 24, 2019 10:30am-10:45am CEST
dangerous. words and drought climate change become the main driver of mass migration you can write any apocalyptic scenarios you want and probably most of. the common. sorts of people thirty years on t.w. . u.s. banks outclassed european competitors a new study by e.u. why found that u.s. banks are more than twice as profitable them their european counterparts when you talk to a german franky experts to find out why. also on the show german fin tech company wired card gets ready for a strategic alliance with japan's softbank. and three days after the terrible easter sunday attacks in sri lanka the island's hotel and hospitality sector
worries about the impact on tourist. island welcome to do business good to have you with us a study by consulting firm eve why has revealed a striking difference in the size of profits u.s. banks are making compared to their european counterparts taken together the ten largest u.s. banks last year made a profit of one hundred and thirty eight billion euros now compare that to the top ten european financial institutions they made fifty two billion that is less than half as much j.p. morgan chase was leader of the pack in the u.s. bringing in a massive twenty eight billion euro profit in europe it was ages b c that came out on top with twelve billion euros now some major names like door chipmunk are way down the list with a relatively speaking of course measly profit of two hundred sixty seven million euros so why are european banks lagging so far behind. and now the study's authors
suggest it's down to a difference in fiscal policy on each side of the atlantic the fed initially responded to the two thousand and eight financial crisis by keeping interest rates at close to zero but when things looked up again in two thousand and sixteen it didn't shy from raising them again now that's unable to american banks to return to massive profits banks in europe on the other hand still face super low interest rates asset by the european central bank for more i'm joined by hans peter a book called he's the holder of the chair in banking and financial services at the university of one high and it's good to have you with us a lot of financial crisis i mean it started a bit more than a decade ago why is europe lagging behind when it comes to recovering well for sure we were not so fast and coping with the problems of the financial crisis to try to stretch the losses over many years which is not a good idea and the and furthermore there's still all these legal problems some
european banks have to pay for that but apart from that i mean european profits are maybe too low but american profits are also to hard so seemingly competition also plays a role besides a central bank policy for sure why the profits are comparatively low let's take to the central bank policies for just a second the fed has raised into its interest rates the e.c.b. doesn't why doesn't it follow suit. well it's a conflict was in your opinion some regions in the europe still need a low interest rates as some banks there would have problems with high interest rates especially to support the state budgets in these countries italy is grendel saying is could simply not afford paying much more than it does actually and other regions in europe we definitely don't need to hold so low interest rates and this conflict is at the moment solved in favor of the contras who need that need low interest rates and that's where we are where we are at the moment and what are the other problems you mentioned something about legal cases and you also said that
some u.s. banks just too much profit is too high how that. well in the end banks are tense action costs of the economy and so if so much of the of the surplus of the economy flows into bank profits so assuming it's not a good thing in the united states it might be due to some degree to the fact that companies need to have access to the capital market and that's a company standing between them and the banks so they make a nice profit from standing in between present europe we've got a wide range we've got banking based system we've got a couple of market based systems and there are alternatives and there are strong competition as a consequence of bank profits are pretty low all right so this is still here in europe is somewhat different to the one in the united states what does this mean for european banks what can they do to basically get back on track. luckily very little they're trying to be as efficient as possible at the very moment they start to become global we have to play it was americans and america is simply much stronger based on this higher profits this specially turns up if you look at
a penalty as to how to pay for misdeeds legally steve in the past because they paid in similar categories but for banks which is much more profit it's much harder to make those payments especially to the american state than for banks with so high profits and obviously this is develop and if you just look at deutsche bank paid around its own market value in penalties during the last let's say eighty years and that of course hurt a lot and right now we're actually in a week right now would you want your bank is in merger talks with germany's second largest lender. is that the way forward this kind of consultation. depending on your luck if you say to but there's a way to go through is having higher bank profits through lower competition which would not be good for the economy overall that's the way to go maybe but in the end all these banks have problems inside the bank there must hold for themselves and to make them more complex by merging them doesn't make sense easier to write
a book or the holder of the chair in banking and financial services at the university of hawaii thank you so much for your insight. japan's soft bank is to invest nine hundred million euros or a billion u.s. dollars in the troubled fifth financial technology company why is the german firm specializes in providing electronic payment this is it was a rising star of germany's thin tech sector but has been shaken a series of financial times articles that made allegations about its operations soft bad which has a robotics division will gain a stake of more than five percent in wire cards. it's also worth talking about a little bit more in detail now with our financial market correspondent canards first of all what is a soft banks is trying to do strategy there why are they interested in wild card
you know want to. is really big in handling financial transactions on the world wide web and soft bank this is not only a fixed line photo operator in japan this company and its owner mr masayoshi some of this is a huge investor in everything tech in the idea that tech will rule in the future soft banks invested over for example alibaba yahoo japan slack and many many other companies and obviously soft bank or its owner is to some were convinced that the wild card was a bit of a bargain after the heavy losses the share had seen you know following those allegations of falsifying revenues in asia so you're telling us basically that wire cut is another feather in soft bags chap but what does it mean for why a cot is a good for them. absolutely you know the share price to vary of why
a car is skyrocketing here in frankfurt's trading obviously investors believe that short selling strategies you know negative speculations against card make no sense in the future we have to keep in mind up until easter a ban on short selling shares was put in place by the german financial of thora teens though with this over of course there was a risk of short sellers coming back but you know this partnership with softbank seems to indicate. why a car wants to say let's you know do not return short sellers it makes no sense we have a strong partner at our side and i have to also strategically of course this makes sense by becoming one of the investment of softbank is the big family now of first movers of first scalars this investment is really a bit of
a knighthood all right susan there in frankfurt thank you so much. and i just love the other global business stories making headlines around the world . both the nasdaq and s. and p. market indexes in the united states and it's trading at record highs on tuesday it follows strong quarterly results for many of wall street's biggest tech firms germany's dax also closed on a six month high propelled by gains in the pharma software and financial services business. twitter smashed all expectations last quarter by tripling profits the microblogging service made one hundred ninety one million dollars in the first three months of twenty nine thousand compared to just sixty one million a year ago to chief jack dorsey credited moves to weed out abusive and fake content on the site with boosting its attractiveness to advertisers.
well impeccable beaches like this one glowing hills of green tea plantations and of course vast jungles with wild elephants all of this is what attracts thousands and thousands of tourists to sri lanka every year but now since those terrible easter sunday attacks the island is associated with tara and death and what makes it even worse only this year is really unclear had been named one of the top tourist destinations for twenty nine thousand tourists and made up around five percent of the country's g.d.p. in twenty eighteen and it was its fastest growing source of foreign currency now the recent attacks could set sri lanka's economy back for years to come. the beaches are empty a result of the terror attacks most tourists have gone home others are too scared to come out of people now often one. thing is to come but some are not given often and just can't. but i can be big.
and decent amount of beef this. holiday business is important for sri lanka before easter sunday the country's financial situation was already rough last month the i.m.f. extended a one point five billion dollar loan into twenty twenty analysts have commented a collapse of the tourism sector to cause the rupee to weaken in turn leading to higher interest rates impacting businesses across the economic spectrum economic impact. of such i mean it's inevitable in the short oh so we really have to face the consequences but we as a country and say look at tourism to try and you know rebuild. confidence in the minds of the travelers potential travelers. but you know what we won't and not all hope is lost some tourists remain defiant in the face of
terror and once you have done and we can change our lives because of it there because that's not the stuff there to change our lives and we don't want to change our lives other countries are also recovering from the terror attacks of recent years the number of tourists that visited turkey grew by over twenty percent in twenty eighteen many sri lankans hope their country will see a similar rebound. and that is your business update here on t.w. for me and the team member len thanks for keeping us company.
with different languages we fight for different things that's fine but we all stick up for freedom freedom of speech and freedom of press. giving freedom of choice global news that matters. made for mines. what's the connection between bread biome and the european union he knows guild. correspondent
alan baker can stretch this line with the rules set by the. team. smoking recipes for success strategy that make a difference. baking bread on. hello and welcome to arts and culture news and the united nations is currently debating a german led bid to step up efforts to combat sexual violence in war zones also this big coat instigated by hollywood star angelina jolie will be talking about that and the celebrity culture of getting involved in such political issues also coming up. a huge street exhibition with a fantastical backdrop has opened in western germany.
three d. printers and how they can help recycle plastic waste. in monday's washington post newspaper article appeared written by angelina jolie and the german foreign minister heiko mosse it was a call to the international community to support survivors of sexual violence perpetrated in war zones and also to prompt punish the perpetrators of such crimes is written to come inside with a debate at the u.n. about this very subject to talk about this and the subject of celebrities getting involved in political issues i'm joined by my colleague david leavitt's david let's start with angelina.